If a transaction in the balance of payments of Country A enters the foreign exchange market, then it is fair to say that:
a. Sources of funds in Country A's balance of payments are supplies of Country A's currency.
b. Sources of funds in Country A's balance of payments are demands for Country A's currency.
c. Uses of funds in Country A's balance of payments are demands for Country A's currency.
d. Transactions in Country A's balance of payments have no counterpart in the foreign exchange market.
.B
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An unexpected rise in Housing Starts should send bond prices __________ and stock prices __________
A) up; up B) up; down C) down; up D) down; down
When the U.S. government runs a deficit, the resulting higher interest rate:
A. reduces firms' desire to invest, and "crowds out" domestic investment. B. increases firms' desire to invest, but "crowds out" domestic investment. C. reduces foreigners' willingness to invest in the U.S., but still "crowds out" domestic investment. D. increases foreigners' willingness to invest in the U.S., which "crowds out" domestic investment.
When there is a high degree of complementarity between two products, then the indifference curves will:
A. be reasonably close to straight lines. B. be perfectly straight lines. C. bend sharply. D. be positively sloped.
One of the main purposes of the Fed's reserve requirements is to
A. provide cash flow for business firms. B. provide sources for foreign exchange. C. provide sources for foreign investments. D. regulate the lending ability of member banks.